Ankara: Turkish Prime Minister Ahmet Davutoglu dismissed Russian allegations that Turkey was buying oil from Islamic State as "Soviet-style propaganda" on Thursday and said the NATO member was doing all it could to secure its border with Syria.

Russia`s defence ministry said on Wednesday it had proof that Turkish President Tayyip Erdogan and his family were benefiting from the illegal smuggling of oil from Islamic State-held territory in Syria and Iraq.

"In the Cold War period there was a Soviet propaganda machine. Every day it created different lies. Firstly they would believe them and then expect the world to believe them. These were remembered as Pravda lies and nonsense," Davutoglu said.

"This was an old tradition but it has suddenly reared its head again. Nobody attaches any value to the lies of this Soviet-style propaganda machine," he told a news conference before leaving on an official visit to Azerbaijan.

Davutoglu said a rejection of Russia`s claims by the United States was further evidence that Moscow was peddling a fabricated narrative.

US State Department spokesman Mark Toner said on Wednesday that Washington rejected the premise that the Turkish government was in league with the militants to smuggle oil, saying it saw no evidence to support such an accusation.

But President Barack Obama and other senior US officials have also voiced frustration in recent days at lingering gaps in security along a roughly 100 km (62-mile) stretch of Turkey`s border with Syrian territory controlled by Islamic State.

White House spokesman Josh Earnest said on Wednesday that some areas were still not properly secured.

Davutoglu said Turkey was doing all it can and is setting up "physical barriers" on that stretch of border. He said Turkey was working with coalition partners to try to remove Islamic State fighters from the Syrian side.

"98 km of the border is under Deash control, physical barriers are being setting up here," he said, using an Arabic acronym for Islamic State.

"Turkey is undertaking all kinds of work with coalition elements to remove Deash from the border in the period ahead."